Finland set to start experiment on "universal basic income"

The preliminary report on a universal basic income conducted by a working group has been completed and submitted to the Ministry of Social Affairs and Health, announced by the Finnish Government on Wednesday.

The basic income experiment is one of the key projects formulated in the current cabinet of Finland, said the government in a statement.

The government described the scheme now as "a partial basic income model." The model would consolidate many of the existing benefits offering basic economic security, while earnings-related benefits would remain largely unaffected.

The government said that the completion of the report marks the turning point of the scheme from an idea to an experiment, which will be carried out in 2017 to 2018 in the country.

Olli Kangas, research leader of the project, told Finnish daily Turun Sanomat that the level of the basic income could vary in different groups, but the basic premise would keep at 550 euros per month.

This would avoid the problem, for example, the same amount is not enough for housing in the metropolitan area than elsewhere in the country due to high housing costs, explained Kangas.

Kari Hamalainen, researcher at the National Institute for Economic Research, was quoted by Turun Sanomat as saying that at least 10,000 people should be involved in the experiment.

The current Finnish welfare system provides unemployment benefits and additional living cost subsidy on basis of verification of the beneficiaries' labor force status and income level.

Kangas said earlier in an interview with Finnish media that the so called "basic income" will only replace the subsidies to individuals, such as subsidies for families with children, student allowance, unemployment benefit, sickness benefit, housing subsidies and so on. The universal basic income scheme could simplify such multifarious procedures.

Meanwhile, Finland's welfare system also includes heavily subsidized health care and free education, as well as a variety of social services funded by the government. These benefits are entitled to all Finns, regardless of their income and social status. The universal basic income program will probably not affect these benefits.

According to the Finnish Social Insurance Institution Kela, experimental research on the universal basic income scheme started in October last year, aiming to simplify the current social security system and promote employment.

The research project is led by Kela in cooperation with the National Institute for Economic Research, Universities of Helsinki, Tampere, Turku and Eastern Finland, as well as the Finnish Innovation Fund Sitra and the Federation of Finnish Enterprises. Endit